441-02490 (Taxation)

The government has taken a range of actions to address tax fairness and cost-of-living pressures.

One of the government’s first actions after taking office was to reduce the rate of the second personal income tax bracket from 22 percent to 20.5 percent, while introducing a new top bracket of 33 percent for the wealthiest Canadians. The government also increased the amount of income middle class Canadians can earn before paying tax (the basic personal amount) by almost $2,000.

In addition, the government has:

• Permanently increased the corporate income tax by 1.5 percent on bank and life insurance company groups in Canada, and introduced a one-time Canada Recovery Dividend of 15 percent the largest bank and life insurance company groups;
• Introduced a 2 percent tax that applies on the net value of share buybacks by public corporations in Canada;
• Implemented a luxury tax on private jets and luxury cars priced over $100,000 and boats priced over $250,000;
• Introduced in Canada a global minimum tax, which ensures that large multinational corporations are subject to a minimum effective tax rate of 15 percent on their profits wherever they do business; and
• Improved tax fairness by closing loopholes, cracking down on tax evasion, and eliminating measures that disproportionately benefit the wealthy, such as the modernization of the Alternative Minimum Tax, to ensure that the wealthiest Canadians do not avoid paying their fair share through the significant use of deductions, credits, and other tax preferences.

More recently, in Budget 2024, the government announced its intention to increase the inclusion rate on capital gains realized annually above $250,000 by individuals and on all capital gains realized by corporations and most types of trusts from one-half to two-thirds, effective June 25, 2024. The proposed higher inclusion rate on capital gains would result in more equitable marginal tax rates across revenue sources and income levels.

The government has also taken action through the tax system to support those who are the most affected by cost-of-living pressures driven by inflation, including through the introduction of one-time targeted payments such as the doubling the GST Credit for six months in the fall of 2022 and the Grocery Rebate in July 2023.

Through the federal pollution pricing system, the government is also putting a price on pollution while making life more affordable for families through the Canada Carbon Rebate.

The government will continue to look at ways to improve the fairness of the tax system and support Canadians who need help most.